Titanic, in the history of world navigation has been proudly known as the Unsinkable ship

Suning in the 2012 is facing the same challenge. After more than 20 years of retail jindong, the real challenge is not how Su Ning can avoid hitting an iceberg, but has hit an iceberg, how to make the ship go forward, rather than wait for the sinking.

How did the Titanic sink?

In the Titanic design, if the ship's 16 waterproof cabin only 4 water, the ship can float, but unfortunately there are 5 of the outer wall of the hatch was torn by icebergs, abandon ship is an inevitable choice.

As the best chain retailer in China, suning if online retail only accounts for all social merchandise retail 20% may have no impact, but unfortunately in the past year, Suning's home appliances 3C category, online accounted for the ratio has rapidly climbed from 7% to more than 17%, but also in the acceleration of development, Abandoning the line under the development line is also an inevitable choice. Suning is not how to warn, how to avoid the iceberg problem, but has hit the iceberg.

At the end of 2012, Jack Ma and Wang to gamble on whether online retailing would account for half of the total social retail sales in the next 10 years. Perhaps including catering services, may not be able to achieve, but only look at home appliances and 3C category, in the foreseeable 35 of the inner lane will inevitably exceed the line, Suning does not have 10 years of transition time window. Otherwise, as the offline market is eroded, and the line can not beat the rival Jingdong Mall, Suning will be like the Titanic sank forever.

Of course, this is definitely not just the fate of Suning, but all the traditional retailers need to face the challenges.

Su Ning Sharp turn

June 19, 2012, suning additional 5.5 billion, in its headquarters in Nanjing, held a conference, High-profile release of the "2011-2020 New decade Development strategy", Chairman Jindong with the Executive Team group debut, from the chain of noodles, performance, marketing, E-commerce and other aspects of the target is expected, and "down malicious words" : Suning in 2020 will become the total number of stores 3,500, sales scale of 650 billion yuan (offline 350 billion, online 300 billion) of the Super service provider.

After a short six months, Su ning why again bones adjust long-term strategy, must be for a reason. Because the strategy developed six months ago is simply impossible to complete. Regardless of the online suning easy to buy income, suning line of real store income 2012 years ago three quarter negative growth 1%, stores also from the annual net new increase of more than 300 to negative growth, the line has been shrinking is no longer possible. Therefore, online income has become the only growth point of Suning's future income. In order to adapt to the changes in the new situation, the online business needs to inject more resources, the strategy of adjusting nature has become inevitable.

Otherwise, the outcome will be the same as Gome.

Gome November 19 released the first three quarterly financial reports, Gome's first three-quarter net loss of 687 million yuan, and the same period last year net profit of RMB 1.791 billion yuan. The first three quarter revenue for 36.057 billion yuan, compared to the same period last year, 43.983 billion yuan year-on-year decline of about 18%, the first three quarters of Gome's gross profit margin of 15.88%, and the same period last year 18.85%, gross margin fell 2.97%. Already through the message channel to understand: Wong Kwong Yu no longer fighting, Best Buy to return to China, Huang may sell gome to Best Buy.

Summary: Review 2010 Jindong said the value of the destruction of electricity is worthless, to 2011 years, the electricity business is only the traditional retail supplement, and then to the end of 2012 after the adjustment strategy, will be regarded as the future of Suning. China's retail industry is undergoing tremendous changes, and Suning has to adjust the strategy to adjust resources to meet new challenges.

Su Ning put down the lifeboat: Promote online business status

In view of the rapid development of online retailing in China, suning in the second half of 2009 on the line of Suning easy to buy, is officially into the online retail. Review history, 2010 2 billion, 2011 5.9 billion, 2012 18 billion, the third quarter of 2012, suning revenue accounted for the overall revenue of Suning 16.94%, put the Sihai is people's stunning performance. The question, however, is whether the growth of unsustainable, low-cost promotions (0 yuan) will continue in the 2013, despite the user experience.

It is expected that suning will be able to have a greater breakthrough, must borrow the various resources of Suning, and the original organization and business framework system is unable to meet these requirements. Therefore, in this strategic adjustment, compared with the previous, the biggest change is the new three operating division, chain platform operating headquarters, E-commerce operating headquarters and commodity management headquarters, E-commerce online business importance to be promoted to the position of equality with the offline electric.

As for the three operating division under the combination of solid products, content products, service products, three major categories of 28 business departments, the formation of "platform sharing + Vertical Synergy" of the operation of the combination, how to understand the interpretation is not important.

In addition to expect line online fusion is no hope, and do not say that a lot of users do not go to the entity shop experience to order, even if the user went to the physical store, it means to the Suning electric dealer orders? Suning's Experience shop, can also be Jing dong, can be the Xun network experience shop. As for the line under the same price, it is not possible. Either offline and online at the same price, the lower gross profit margin of 19% down to 7% below the line? A lucrative business becomes a losing business, obviously impossible. Either online prices and the same price, online 19% gross margin how and adhere to 10% of the following gross profit margin of Jingdong, Xun network competition. In short, closing will continue, the remaining store resources, also do not see a special value.

Simple summary: E-commerce is the future of Suning, the line into the line of support power, offline into a complementary line. Online war needs support, line to support to cooperate, then the status of the line will be promoted, the interests of all parties need to be coordinated. Bite, success or failure in this battle, Jindong a big bet.

Su Ning needs to upgrade and reform

No matter how suning jindong how to do, Suning changed into "Cloud quotient", or "mall", these things users can not see, also do not need to pay attention to. Users buy things in Suning, only focus on goods, prices and services. Su Ning's adjustment, can let Suning's commodity richness increase? Can let Suning's commodity price be cheaper? or can it significantly improve the service quality of suning, let Suning electric dealer's distribution speed up to the day, the next day up?

Let's take a look at the gap between Suning and East in commodity richness, cost efficiency and user experience.

Suning's SKU is not more than 1.5 million (half is book), and Jingdong more than 2 million, if you carefully compare each category, intuitive more obvious, suning only completed the horizontal category expansion, depth is still poor.

Suning's overall inventory turnover days in 70 days, and jingdong overall inventory turnover days for 32 days, specific to 3C category only 15 days. Suning's cost-cost rate rose to 15-16%, while Jingdong was around 8-9% (the latest estimate).

Suning Electric Business User experience, in addition to everyone can achieve the next day, other including 3C in the basic 3-5 days, or even 6-7 days. The delivery is slow, and the predicted delivery time is also very inaccurate. And know the latest data is the second quarter of last year orders from the average order to out of the library less than 1 hours, 52% of orders, 4.2 hours after the warehouse delivery customer.

How to enrich the goods? The need for a large and reasonable layout of the storage system, the need for an intelligent IT system. How to make the price of goods lower? The need for efficient warehousing logistics system, the need for a system-driven commodity management operating system, low-cost operation. How to make the service user experience better? Still need a mature and stable warehousing logistics system, need a stable IT system. Of course, warehousing logistics and IT systems, all need a good team to be able to do well. All these, Suning has it?

Suning Electric Business Warehousing, we can share the group's storage resources, but including 3 C, daily necessities, including small pieces of storage, as well as the last kilometer, the need for additional preparation. According to Suning's plan, 12 small warehouses distributed nationwide will not be completed until the end of 2015. Electric rapid, can you afford to wait three years?

Suning Electric IT system, suning is a IT system is not to be regarded as a retail enterprise. But compared with the excellent electric business, is far from enough, otherwise it will not be the core system to the Third-party service providers. Because whether it is Amazon, or the domestic jingdong, Xun network is a self-built IT system. As to the Third-party service providers, see the user complaints can be known. Suning easy to buy before the complaints, most from the IT system, such as the daily occurrence of such a situation: the Web page open slow or even can not open, the goods can not be normal under the single, payment is unsuccessful, rebate system does not default ... These problems are much more in promotional days. IT system has become the core bottleneck of the development of Suning electric business, and has seriously restricted the subsequent development.

Simple summary: Suning electric Business is very important, but to build the core competitiveness of suning electric business two important capacity warehousing logistics and IT systems, did not do well, and two or three years hopeless solution. Therefore, Suning will continue to maintain a high cost of operation, as well as the poor user experience of the operation of the state. The enemy can be victorious, Su Ning's competitors know not deep enough.

Su Ning should slam the brakes

Yesterday and colleagues dinner, I said Su Ning faces huge challenges, it is possible to unexpectedly out. Colleagues agree with Su Ning's dilemma, also feel that Suning's new strategy is not too many bright spots, but will not be out. Because the SU Ning government relationship is strong, but will not let it fail, Su ning behind several pe unwilling let it pour. 10,000 steps back, suning online with a large number of real estate assets, sold, also enough suning live decades.

Of course, business is not to do so, from my personal point of view, Suning do not rush to complete its 650 billion, do not rush to defeat Jingdong. Retail is a marathon, not a city pool gains and losses, building a large-scale growth of the foundation is the key. Retail is done, what supply chain finance, big data, also natural. Retail does not do well, other "cloud quotient" concept, such as water in the moon mirror flower, is meaningless.

Simple summary: suning to "cloud quotient" concept, can give investors listen to the government to listen to, get more support. But do a good job of retail or fundamental, still have to pay attention to cost efficiency, pay attention to the user experience, so at this stage of the transformation of warehousing logistics system, improve IT systems, is more critical, these need time, need to Su ning electric dealer brake, slow down.

For Su Ning's hope, do not run the marathon when the Hundred meters sprint

I hope Su ning transformation succeeds, why? Because countless traditional enterprises are staring at Su Ning, before countless retailers brand business have tried, have failed. If such a resolute transformation as Su Ning, so willing to invest in a large amount of resources, with such a good executive power of the team of retailers have failed to transform the traditional retailer's heart, is really going to die.

To borrow my colleague's words end: 2013 is the key to the electricity business year, can be said that suning success or failure in this battle, but the most important thing is how to create a low-cost high efficiency, and to ensure that the user experience of the scale of growth base. Retail is a marathon, not a 100-meter sprint.